| Chinese current property tax system was established in1980s. With economic developmen,it has become obsolete and is necessary to reform. In2011China began to carry out property tax reform in Shanghai and Chongqing. The reforms are significant because it is helpful for the improvement of China’s tax system and to solve the ills of the land what has become a local government financial problems. But the question is that we put the property tax as a tool ofcontrolling house pricesbut ignore other purposes. This paper reviews the background of Chinese real estate market and the current property tax system and from the view of theoretical and empiricalstudy the relationship between the tax reform and house prices. We think that the estate tax is impact on the house price h in the short and long term, but its main function is to stabilize house prices, instead of controlling house prices, This paper argues that supply and demand can determine prices in the real estate market and property taxes play a role in which housing demand is mainly for investment in particular to curb speculative demand for housing. Secondly we argues that in order to make property tax more effective in stabilizing price, the tax system that is perfect suitable for China is essential... |
